'Business as usual' is no longer a workable option
Nobody is immune from the effects of a grinding recession that started in 2008 and shows little sign of relenting. So what is the HVAC sector's reaction to this depressing state of affairs? Some companies take a cautious, not to say, negative line while others act positively. As Ian Vallely reports, ventilation equipment supplier VES favours the second approach
There have been a variety of responses to the on-going global economic downturn, widely acknowledged as the worst in modern history. However, essentially they boil down to two alternatives. Some companies choose to batten down the hatches and cling to the hope that better times will arrive before they are forced out of business. Others are more assertive and take matters into their own hands.
VES, the Chandler's Ford, Hampshire-based manufacturer of ventilation products, is most emphatically in the latter camp.
Director Tom Sands admits that, in common with most building services organisations, his company faces lower business levels as a result of the depressed UK economy, but he refuses to be downcast: 'The big challenge that we, like others, face is winning enough orders of sufficient quality to keep the company trading, and getting paid for them. But we are succeeding in doing that.'
Indeed, VES is doing far more. The company's management rejects the notion of adopting a 'business as usual' approach. It has always ensured that it reinvests profits into a substantial research and development programme - it invested around £1.15 million in r&d this year - but, three years ago, it went further when it began a significant rebranding process.
Tom says: 'At that time we did a lot of research into our customer base and how we were perceived by them. In the light of that, we looked at where we thought we should be and repositioned ourselves right up at the top. We have really benefited from that.
'Every company has to change with the times and I think VES had got to a point where it needed a refresh. The research we did reflected that.
'The perception was that we were a manufacturer of small air handling units and we were pigeonholed thus. By rebranding, we were able to correct this misconception. On top of this, refreshing and unifying our sales literature led us to more coherent trading approach and streamlined the way we do business.'
As part of the overhaul, VES has also introduced a 'buy online' facility via its www.vesdirect.co.uk website.
But the company's assured response to the global slowdown did not stop there.
Tom explains: 'One of the ways we have faced up to the recession is by implementing a total revamp of our product ranges. We have invested heavily in ensuring the products comply with British Standards and with Part L2.
'We recognise that we have to ensure we target the right customers, the right sectors and the right projects with the range of products we offer and this has been at the forefront of our thinking.'
VES's core customers are consulting engineers and contractors, but it also deals with other individuals and organisations including councils, universities, estates organisations, facilities managers and hospital trusts.
Much of the company's business is UK-based, but it is starting to widen its horizons. Tom again: 'Exports currently account for 5 to 10 per cent of our business and, while we are keen to see that grow, many overseas markets are suffering the effects of the same global recession we are in.
'We already have experience exporting to the Middle East and some Far East countries. We have also exported to unusual places such as the Falkland Islands and Antarctica.'
Indeed, VES has a dedicated export team that deals with overseas enquiries and these are passed to the relevant departments, whether product sales or services such as refurbishment.
So the company's response to the poor on-going economic conditions has been - and remains - robust, but Tom recognises that the recession is not the only test facing hard-pressed HVAC companies: 'A second challenge is finding suitable staff. It seems to me that there is a diminishing skills base in the HVAC industry. On the site services side we are still trying to recruit staff, but it is difficult to find the right people.
'What we have had to do is take on people with, say, refrigeration experience and teach them the HVAC side. This is less than satisfactory.'
Attracting high calibre of employees is a perennial problem for the building services sector. As Tom says: 'I don't think anybody grows up with the ambition of being an HVAC engineer, but I would argue that building services is an excellent sector to get into. The trouble is I don't believe there is an awareness that it is there - I think a lot of people have come into the HVAC industry by accident rather than by design.'
And he acknowledges that this makes training a critical activity for progressive companies: 'We take on people knowing we have to train them. We have specific requirements. For example, we design and manufacture silencers so we teach people acoustics, we make controls so they need to know about electronics, for ventilation they need to know the technicalities of fans, then there is heating and cooling so they need to know about psychometrics, and so on. We have to train people in a whole raft of disciplines.
'Then, of course, all the components have to go into a system and our people need to know how the different elements interface together. So we tend to take people in with associated skill sets and teach them the specifics they need to know for our business.'
VES in a nutshell
VES was founded in 1968 by David Peters. From a small factory unit in Andover, the company has grown to boast a current turnover of £21 million with a target next year of £23m.
It manufactures ventilation products for public, commercial and industrial buildings including air handling units, duct-mounted fans, roof extract units, twin fan units, control panels, high temperature fans, silencers and condensing units.
The company prides itself in its ability to design and build non-standard equipment to suit customers' specific requirements. Most of its equipment now incorporates integral controls. Indeed, director Tom Sands says the controls division has been one of the principal growth areas over the last 10 years: 'We make about £3 million worth of controls a year so, as a controls company alone, we are probably bigger than most, but all those controls are allied to the product.'
VES has around 250 employees and claims to offer full national coverage from regional offices and 11 site engineers scattered around the UK.
Managing director John Peters says VES has always been more than just a family business: 'We have strived to ensure excellence in all that we do, from quality of product through to delivery and value for money. We helped pioneer heat recovery technology and recognised early on the need to offer alternatives to just replacing existing older units.'
The company has more than 12,000 sq m of manufacturing and storage space with full manufacturing and powder coating facilities at its factories in Chandlers Ford and Eastleigh as well as its engineering centre in Manchester and an outlet in Glasgow.
To complement its manufacturing operation, VES has also operated a specialist site services division since 1992.
Comprising sales, project and technical teams, this is responsible for upgrading air handling, packaged air conditioning and ventilation equipment. It also retrofits cooling coils, silencers, etc and repairs systems. And it offers refurbishment and an air handling unit flat packing service for sites with restricted access.
Overall, including both products and site services, the split between the company's private and public sector work is around 60 per cent private and 40 per cent public (including military, schools, hospitals, councils, and so on).
Tom Sands sums up his company's strengths thus: 'We produce a comprehensive and adaptable standard range of products to cover most people's requirements and then move into tailor-made products to cater for more challenging applications. We are a large company, but we also strive to be flexible.
'We want to keep ourselves fresh and interesting to customers by offering value for money products and services that they need. We have approached this objective by being as innovative as possible while still remaining competitive.'
10 September 2012